This is a narration of a beginner forex trader.
You are moving on with your life, maybe seated on the couch, scrolling through your social media feed. Then, an advert pops up, on youtube, television, or your social feed. It is a video or a poster, and if a video, it would maybe go like this, for the first three seconds “Do you want to make money trading forex……” Now, you are hooked, because you want to make money, extra money. You watch the whole advertisement and not skip it. Now you get interested. At this point, your old perception about forex was “It is a scam!” “It is a pyramid scheme, used to recruit others and you earn money through referrals”. Well that is not Forex.
You now start getting curious. You are learning more about it on Google, you take a step and start researching more on Youtube.You get a preferred “Forex Guru” who makes sense to you. Somewhere along the way, you learn that all beginners have to start out on Babypips.com . You head over to babypips.com and begin the “Ultimate Guide for Forex Beginners”. You start learning. One week now you know of the charts, you know the parts of a Candlestick, and now you are gaining some confidence and along with it more interest.
You are still on the learning journey and you discover the Forex Brokers nearby. They are offering free forex education. You get even more excited and sign up for the free course.
Demo – Account Opening
After 3 to 4 lessons with the Forex Broker, you are asked to open an account. You open a Demo Account – an account funded with not real money. You are then advised to start trading with a demo account for 1 month and once you feel confident, you can have a try with a live account, where you use your own real money deposited with the broker. One month down the line, you have traded successfully on the demo account and you are fully confident to go live.
Live trading – 1st attempt
You fund your account with 100 Dollars and now your actual trading journey begins. You are in a few trades, you make 5 dollars, you get out. You get in another trade, you make 3 dollars and out. You get excited. You are scalping. You are making something. Your next trade goes red, you panic, the loss increases, but you hold on to it with the hope it will turn around. It gets even bigger and you get even more tense and in panic, you take the loss. Now you are 60 dollars down and your account is close to a mere 40 dollars. But you do not give up and continue trading, now you have one position in the negatives and another positive. You are excited about the positive amount and you take it. Your capital is increased. You still hold on to the losing trading in the hope it turns around. But the moment you step out of your computer for a few minutes, you had a margin call, and your whole account has been wiped to zero.
The $100 Dollar loss hits you hard. You believe you haven’t gotten something right. You go back to reading more and this time, you are trying to find out what you could have missed. One to two weeks of reading and you are ready to get back to trading. Now you go back to trading on the Demo account. You trade for 2 weeks and you feel confident to go back live.
Live trading – 2nd attempt
You fund your account, this time $50 Dollars, as a risk measure, just in case you lose it, the effect won’t be as much as losing $100 Dollars. True to your words, the effect won’t be the same, neither will the longevity. Your account is wiped again to zero as soon as possible.
At this point, you are frustrated with Forex and now you believe it is a scam meant to rob people of their hard-earned money. You only think of the $150 Dollars you have lost cumulatively. You quit, and now you become part of the statistic of 95% unsuccessful traders.
In retrospect, when you look at this journey, you notice a few things.
- The knowledge you acquired from various platforms and given from free educators is not sufficient.
- You did not trade on a live account enough to understand and master the forex market.
- Lack of a proper right risk management plan in place.
- Lack of a mentor to guide and coach.
You can get all these by learning with Nairobi School of Forex. You get unlimited mentorship, $500 Dollar live funded accounts and unlimited first-class training.